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Land values in urban areas always increase in response to upzoning and loosening of development restrictions.
by shuckles 6y ago
Land values in urban areas always increase in response to upzoning and loosening of development restrictions.
- epistasis 6y agoThat's because we have restricted land use so much that any upzoning is in response to intense pressure, which focuses massive amounts of capital that was waiting on the sidelines to compete for the new opportunity. If, instead, we hadn't massively down zoned everything in the 20th century, an upzoning wouldn't be "giving away" lots of value, because there would be an abundance of locations that could be used. This is why small focused upzonings like those that happen in NYC and SF are so disastrous and destroy neighborhoods. Instead of gradual city-wise change like what happens in more affordable places like Tokyo, SF and NYC are super expensive because they set zoning so almost everything is "built out." Any area that is "built out" has reached complete failure in city planning, in my opinion. Which is pretty much all of the Bay Area.
- shuckles 6y agoI'm a little confused. Land values in Tokyo are high and have climbed consistently above inflation (post-bubble, of course).
- epistasis 6y agoEdit: I should preface this by saying that I'm not an economist, and would welcome nothing more than being able to learn through this discussion, and am quite likely to be wrong on this! I appreciate the engagement. But housing prices are affordable in comparison to places that have restricted use in less efficient ways. "Higher" is a relative term, and the question of what the baseline should be is quite complicated. They are also quite variable depending on what you can do with the land; if use is extremely restricted it can keep a plot of land down in price, even while it inflated the cost of land overall in the market.